Rumored BlackBerry Ltd Deal Could Be Great For Lenovo

Rumored BlackBerry Ltd Deal Could Be Great For Lenovo

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares spiked 8% on reports that Lenovo is eyeing the company for acquisition. If the reports are to be believed, the Chinese PC maker could offer $15 per share, but the deal could prove sweeter for Blackberry. Many analysts are also positive on the deal, and believe it could be a win-win deal for both parties.

Security concerns may impact BlackBerry-Lenovo deal

Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga, “it would be great deal for Lenovo.” Udall said that there are some regulatory issues, and it is still to be seen if a Chinese company is allowed to buy a Canadian or a U.S. tech company.

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Udall points out that while BlackBerry is of Canadian origin, some of its biggest clients are in the United States, including the United States government. Analysts added that it would be a great deal as, “This is what Lenovo does well, by the way.”

Tech industry expert Jeff Kagan notes that Lenovo is exploring other businessmodela and wants to become more than just a PC maker. Kagan said that the Chinese company is eying the wireless business and wants to be the leader in the wireless handset business. Given the presence of juggernauts like Apple, Google and Samsung the expectations of Lenovo seems a a bit brash, and the firm will face challenges in carving out a small market share niche for itself.

Mixed reaction from analysts

According to Kagan, Blackberry is a name that people know, but it is a name of yesterday. The analyst also noted that the company has been struggling to revive its brand. Kagan said that if Lenovo is, ” going to do it at a bargain-basement price and they’re going to have to throw the dice and reinvigorate the brand.” He agreed that they could do it, but the success is not guaranteed as this is a very difficult market for new companies to break into.

Not all analysts are excited about the potential merger, and one analyst told Benzinga that he has less than zero percent interest in talking about BlackBerry. He added that it is not an interesting company and his clients are not interested either, saying, “this is a rumor. I don’t care.”

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